The JW modifier is described by Current Procedural Terminology as “drug amount discarded/not administered to any patient.”1 Historically, the Centers for Medicare & Medicaid Services (CMS) allowed Medicare Administrative Contractors (MACs) the discretion to determine whether to require the JW modifier for any claims with discarded drugs or biologicals, and the specific details regarding how the discarded drug or biological information should be documented. However, to more effectively identify and monitor billing and payment for discarded drugs and biologicals, CMS has revised this policy to require the uniform use of the JW modifier for all claims with discarded Part B drugs and biologicals.

In June 2016, updates were made to Section 40 (ie, Discarded Drugs and Biologicals) of Chapter 17 of the Medicare Claims Processing Manual,1 which became effective January 1, 2017.2 CMS has revised this policy to require the uniform use of the JW modifier for all claims with discarded Part B drugs and biologicals, and has now alerted MACs that providers are required to use the JW modifier for claims with unused drugs or biologicals from single-use vials or packages that are appropriately discarded (except for those provided under the Competitive Acquisition Program for Part B drugs and biologicals), and that providers are now required to document the discarded drug or biological in the patient’s medical record.

CMS has removed MACs’ discretion to determine whether the JW modifier is required for claims with discarded drugs and biologicals.

It is important that you check with your MAC as to how the JW modifier is to be reported on the claim, and understand that their guidance may have changed more than once since the effective date of this policy. For example, when the revised policy was first implemented, the First Coast Service Options initially directed the provider to combine on a single line the wastage and administered dosage amount and append JW to the single line. Effective February 28, 2017, however, First Coast Service Options revised their guidance to reflect that claims for drug wastage must be billed using 2 individual lines3:

One line signifies the portion/dosage given to the patient

The second line denotes the discarded portion, and is billed with the JW modifier.

When the actual administered dose of the drug or biological is less than the billing unit, the JW modifier is not permitted. For example, if 7 mg were administered to a patient from a 10-mg single-use vial (with the 10 mg representing 1 unit), the administered and discarded amounts cannot be split for billing purposes.

Most, if not all, other MACs also now require that the amounts administered and wasted be reported on 2 separate lines with JW modifiers only assigned to the lines reporting wastage. The following examples for when and when not to bill with a JW modifier are provided by Palmetto GBA4 and Novitas Solutions5:

The JW Healthcare Common Procedure Coding System (HCPCS) modifier provides payment for the amount of the discarded drug or biological.4 For example, 95 units of a drug are administered to a patient from a single-use 100-unit vial, and 5 units are discarded. The 95-unit dose is billed on one line, whereas the 5 discarded units are billed on another line using the JW HCPCS modifier. Both billed items would be processed for payment

The JW HCPCS modifier may only be submitted with the amount of drug or biological that is discarded.5 Do not submit the JW HCPCS modifier when the actual dose of the drug or biological administered is less than the billing unit. For example, 1 billing unit for a drug is the equivalent of 10 mg of the drug in a single use vial; the patient receives a 7-mg dose and 3 mg of the remaining drug is discarded. On a single line, the 7-mg dose is billed using 1 billing unit that represents 10 mg. The single-line item (ie, 1 unit) would be processed for payment of the total administered and discarded amount of the drug (ie, 10 mg). Because of the potential for overpayment, the billing of another unit on a separate line item with the JW HCPCS modifier for the discarded 3-mg dose is not allowed. Therefore, when the billing unit is equal to or greater than the total actual dose and the amount discarded, a JW HCPCS modifier may not be submitted.

National Government Services provides even more detailed guidance regarding the dollar amounts reported6:

To bill for any wasted drug doses not included in the administered amount, the amount wasted should be billed on a separate claim line with the JW modifier. Units are calculated in accordance with appropriate HCPCS code descriptors, and dollar amounts must reflect the amount attributed to the wastage

You must calculate dollar amounts attributed to the amount administered compared with the amount wasted

It is required that unlisted drugs billed with a National Occupation Classification code be submitted with 1 unit of service. The amounts of administered and discarded drugs must be shown in the Notes and Comments Segment of the electronic claim (or Item 19 if submitting paper with an Administrative Simplification Compliance Act waiver). Only providers who meet requirements for the Administrative Simplification Compliance Act waiver are authorized to submit paper claims.